Water-borne diseases are among the leading causes of morbidity and mortality in developing countries and around 2.2 million people die every year due to basic hygiene related diseases, like gastroenteritis, diarrhea, typhoid and dysentry. Eighty-six water samples were randomly collected from urban water supply system of Kathmandu, and analysed to assess drinking water quality. Residual chlorine was undetectable in 100% samples. Salmonella was detected in 4 samples by enrichment culture technique in Selenite F broth followed by plating in Salmonella-Shigella Agar. A total of 10 isolates were identified as Salmonella (S.Paratyphi A 10%; non-typhi 90%) by conventional biochemical test. The majority of the isolates were susceptible to most of the antimicrobials tested; however resistance was observed to amoxycillin 70%, chephalexin 20% and ceftizoxime 14.28%. There was no significant relationship between coliform and Salmonella positivity (P=0.366). The microbiological quality of urban water supply system of Kathmandu is poor and indicates outbreak of Salmonella infection. This study will help control outbreak of waterborne disease.